The New Tories

Posted on October 14, 2013 by alsanblog

Writing in the Washington Post, Colbert King sounds the alarm over “an insurgent poli-tical force” that he calls the “New Confederacy.” According to King, the behavior of this force is “malicious and appalling” as it, in his view, takes up where the Old Confederacy left off in its efforts to “bring down the federal government.”

Of course, King is talking about Republicans who dare disagree with the liberal vision of big government and the centralized direction and control of most of the U.S. economy, including local activities such as healthcare.

But when drawing analogies between today’s big government opponents and others in the past who opposed centralization, liberals like King invariably refer to the Civil War, rather than, for example, the American Revolutionary War. The Civil War is chosen in order to smear Republicans as racists – after all, much better to compare Republicans to those who defended slavery rather than to those who opposed British rule.

This obsession with the Civil War is unfortunate because the answer to the political crisis in this country lies precisely in the approach taken by those who opposed British rule. Not only did America’s colonial leaders defeat the British, but they also created a nifty new government in the midst of significant political divisiveness (i.e., over slavery).

The Founding Fathers based the federal government on the concept of federalism, which limited the role of the central government to one exercising certain “enumerated powers.” But since the 1930s, America has moved further and further away from this structure.

Rather than continue to nationalize all human activity, perhaps it’s time to consider a return to federalism. The concept, however, is unlikely to gain much traction among liberals – big and centralized government is their answer to everything. Opponents of centralized authority are not the New Confederacy, but liberals surely are the New Tories.

P.S.:  Colbert King is an African-American who usually writes about local D.C. politics. But once a year or so, his own chip-on-the-shoulder racism compels him to insult white people who vote for Republicans by  calling them racists, a practice enabled by the editors of the Post. King’s racism is disgraceful, not to mention malicious and appalling, and certainly prevents him from seeing potential solutions to today’s problems.

 

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Where Are The Moderate Democrats?

Posted on October 13, 2013 by alsanblog

Pretty much the entire mainstream media and the liberals they work for are busy laying the blame for the government shutdown and stalemate over the debt ceiling at the feet of Republicans. According to the liberals, there’s a small radical faction within the GOP determined to bring the country to ruin. And evidently, nobody within the rest of the GOP is man (or woman) enough to stand up to the radicals.

But who are the radicals? Yesterday, Democrats rejected a proposal offered by Republican Senator Susan Collins to reopen the government and raise the debt ceiling (e.g., see here). In return, all she wanted was to maintain current spending levels (as set forth in the “seq-uester” that only modestly slows the growth of the central government) for six months, delay the medical device tax imposed by the ACA, and improve income verification for those signing up for a policy under the ACA.

Collin’s proposal was hardly radical, and the Democrats who rejected it are demonstrating the arbitrariness of their own views. Forget about Republicans, the real question is where have all the moderate Democrats gone? To paraphrase the Kingston Trio, it seems they’ve gone to graveyards everyone. Instead of moderation, all we get are headlines such as “Obama and Democrats, united by shutdown, looking for gains beyond it” (e.g., see here).

Yes, Democrats are looking for more:  they hope to seriously weaken the opposition. If successful, they will continue to impose their big government agenda upon 315 million Americans. Liberals are committed to unprecedented levels of spending and greater centralization of authority, which will invariably lead to stagnation and decline. And nobody within the Democratic party is man (or woman) enough to stand up against this agenda.

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Competition Deniers

Posted on October 4, 2013 by alsanblog

In this post at The Incidental Economist, Aaron Carroll agrees that Obamacare may cause hospital layoffs, but tells us that’s to be expected because, after all, if we contain costs, there will be less money for wages and profits. And Carroll further concludes that the result would be the same, even if the health sector were organized more toward markets and competition:

So if we manage to spend less on health care, it doesn’t matter if we do it by the most free market method, or by the most price-setting regulated method.

In making a point about hospital layoffs, Carroll misstates what we might see from a market approach, implies that centralization is essentially equivalent to markets, and seems confident that price controls and central planning will reduce healthcare spending. All of his assertions are questionable.

In a competitive market, cost reductions would shift the market supply curve down, resulting in lower prices and higher output. But higher output, even with efficiencies, could lead to more hiring, not layoffs – it all depends on the shape of the various curves. So Carroll is jumping to conclusions with respect to how a market would operate.

If total spending declined in a competitive market scenario, even with higher output, resources might indeed flow out of the healthcare sector. But it’s not unreasonable to believe that such flows to other areas of the economy would be smoother than what we would see with the “brute force” actions of central planners. So Carroll’s attempt to equate competition with central planning doesn’t succeed.

Carroll is assuming that a centrally planned healthcare economy would actually contain costs. Any government theoretically can contain costs simply by instituting price controls and limiting access to care (to handle the excess demand that a price decrease would create). But when we reject markets, all that’s left is politics and containing costs under a political scenario (replete with the usual favoritism, protests, bribery, corruption, etc.) is another matter entirely. Carroll’s assumption is a little too heroic.

Even if a central authority succeeded in containing costs through price controls and limited access, it would most likely be at the expense of quality. Big government advocates like Carroll pin their hopes on centrally directed incentives and strategies involving evidence-based medicine, ACOs, IPAB, electronic medical records, and so on, but in so doing they ignore the most fundamental fact of social life.

This is the fact that centrally planned economies are decidedly inferior to economies that rely on markets and competition. The 20th century experience in many European and other countries clarified that for us, yet we ignore the history:  it’s as if we’re back in the 1930s when economists argued that central planners could perform just as well as markets. Subsequent decades of the century proved them wrong and should have settled the matter once and for all.

Some healthcare markets may be natural monopolies (e.g., hospitals located in sparsely populated areas) for which regulation may be appropriate, but there’s no reason to believe the healthcare sector is generally exempt from the benefits of competition. So it’s unlikely that centrally directed healthcare will surpass what we could expect from an approach based on genuine competition.

But these facts don’t seem to matter to Carroll and other liberals – evidently, now that such liberals are on the scene, things will be different. And so we have the liberals’ version of “American exceptionalism,” which holds that nothing about America is exceptional other than our emerging central planners.

P.S.:  Of course, even if a centrally directed economy and its central planners could match the results of a competitive market, we should still prefer markets over central planning because a market-based society would mean greater freedom.

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Embracing Central Authority

Posted on October 3, 2013 by alsanblog

WaPo columnist Anne Applebaum sees the GOP as endangering democracy by closing the government in an attempt to stop Obamacare. In her column, Applebaum implies (see here) that those who resist Obamacare are members of an “irrational fringe” and no better than “insurgents” or “coup plotters” who should be arrested and imprisoned.

And why is that, you might ask? Well, because Obamacare is THE LAW (never mind that the administration has unilaterally changed Obamacare several times since its passage). Evidently, for people like Applebaum a law can’t be changed once it’s been confirmed by “three branches of government,” except of course for laws that liberals dislike. In those cases, liberals are eager to organize entire political campaigns based on “change.”

Healthcare provided in Miami has little connection with medical care provided in other cities across the country such as Kansas City or Denver, which is to say that healthcare is a local activity conducted in local markets. Yet Obamacare nevertheless places 315 million people under a central authority in a sector that accounts for one sixth of the world’s largest economy.

The problem is that government has gotten too big and centralized, and believe it or not, there was a time when Americans actually regarded central authority with suspicion. Back in the 1770s and 1780s, for example, the American colonies not only resisted British rule, but actually fought a war to free themselves from Britain under the leadership of Jefferson, Washington, Hamilton, and many others.

So we’ve gone from resisting central authority to heartily embracing it. Today those who “question authority” are regularly insulted and labeled racists while historical giants such as Jefferson, Washington, and Hamilton  (who indeed were insurgents and coup plotters of a sort) are now fit for nothing more than arrest and imprisonment. Indeed, the mullahs must be rolling on the floor in laughter.

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Succinct Wise Boy

Posted on September 30, 2013 by alsanblog

So now Wise Boy a/k/a Ezra Klein adopts this single sentence from a book written by Thomas Mann and Norm Ornstein to describe our current governing crisis:

The GOP has become an insurgent outlier in American politics — it is ideolog-ically extreme; scornful of compromise; and dismissive of the legitimacy of its political opposition.

According to Klein, this sentence represents a certain purity of concept. Of course, the single sentence is blatantly false and a more truthful sentence about the governing crisis would read:

Liberals seek to place 315 million people under the thumb of the central authority for just about any activity, no matter how local; have no respect for freedom, self-government, or rule of law; and hate half the people in this country (i.e., Republican voters).

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The Congressional Exemption From Obamacare

Posted on September 29, 2013 by alsanblog

Finally a conservative steps up to criticize the argument made by other conservatives that the administration is giving Congress special treatment by exempting it from the require-ments of Obamacare. In an article at National Review Online, Patrick Brennan explains that “congressional employees aren’t receiving a special handout” although he doesn’t quite make the key point.

Since World War II, the vast majority of Americans receive health insurance through their employers, including members of Congress and their staffs. But Obamacare is meant to provide insurance to people who aren’t covered by their employers. This means that Obamacare doesn’t even apply to most Americans, including congressional employees (well, as long as we ignore the unintended consequences that might affect all of us).

It’s hard see how politicians could exempt themselves (in the traditional sense of the word) from a law that didn’t generally apply to Americans in the first place, so the “exemption” argument is incoherent. It would make sense if, for example, Congress passed a law that prohibited employers from offering health insurance to employees, but arranged for itself to continue to receive health insurance through its employer (i.e., the government). But that isn’t the case.

As Brennan points out, Senator Grassley simply offered an amendment to Obamacare that required congressional employees to purchase the a policy available on the exchanges (to have a stake in the quality of the policies), but didn’t intend to eliminate the health insurance benefit that the government provided its employees. Evidently, the intention to keep the benefit didn’t make it into the final version of the legislation and thus the controversy (when OPM declared the benefit would be retained).

Some Republicans nevertheless believe the health insurance benefit should be eliminated (thereby imposing a pay cut on congressional employees) and some, such as Senator Cruz, want to go further and strip all federal employees of the benefit. This sort of attack on federal employees has been going on for some time and represents nothing more than retaliation for the fact that government employees tend to support Democrats (and that one third of them belong to unions).

Cruz may be a new rising star in politics, but his and his colleagues’ attacks on federal employees is small minded. The obsession with punishing federal employees for their political views not only implicates First Amendment rights, but is simply disgraceful.

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Defying The Feds

Posted on September 25, 2013 by alsanblog

Well, although healthcare is a local activity, Obamacare is now placing one-sixth of the world’s largest economy under the thumb of the central authority – authority to which liberals meekly acquiesce. The best liberals can do in support of freedom and self-government is to pass laws – wait for it – to legalize marijuana (e.g., in Colorado and Washington). Evidently, federalism looks good to voters in those states only when viewed through a smoky haze.

But wait, now the government of D.C. is set to also defy the feds by staying open during a federal shutdown. D.C. is a government rife with political corruption – from the scandals surrounding crack cocaine smoking Marion Barry, former mayor who still serves on D.C.’s city counsel, to those of the current administration. Evidently, corruption is an “essen-tial” service in D.C. So the one government that should close during a shutdown will stay open. You really can’t make this stuff up.

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Prosecuting Those Responsible For The Financial Crisis

Posted on September 23, 2013 by alsanblog

So now liberals can’t figure out why no one has been prosecuted for their role in the financial crisis.  For example, Neil Irwin of Wonkblog finds it shocking that:

[For] a crisis that drove the global economy off a cliff, caused millions of people to lose their homes and generally spread mass human misery to almost every corner of the earth there is no defining prosecution.

Of course, as a liberal who continues to cling to his big government, Mr. Irwin only wonders about the prosecution of Wall Street executives. Apparently the politicians and government officials who developed and supported the policies that created the crisis in the first place or failed to subsequently exercise proper oversight are allowed to “spread mass human misery” with impunity.

Fannie Mae and Freddie Mac, cheered on and protected by the likes of Barney Frank and Christopher Dodd, developed the mortgage securitization model that Wall Street sub-sequently picked up. Add to that government policies that artificially lowered interest rates and lowered lending standards to insure that more and more loans went to people who couldn’t afford them, and it’s hard not to see government as a significant element of the financial crisis.

One might expect that government officials whose incompetence harmed the country would be run out of town on a rail, but not in America. In this country, we not only tolerate the incompetence, but allow the politicians to blame others and then create new legislation to further expand government power (e.g., Dodd-Frank Act).

This is what Mr. Irwin should find “shocking,” but don’t count on it. Most likely he’ll be in the front ranks with other liberals applauding the next round of incompetence. Indeed, we might see this soon enough if Obamacare fails. The politicians responsible for such a result will undoubtedly be the ones to create a single payer system that will be place 315 million people more firmly than ever before under the thumb of the central authority.

But we’ll see the greatest example of rewarding the incompetent in the upcoming presidential candidacy of Hillary Clinton, one of the Benghazi Liars. It was during her tenure that State Department bungling resulted in the deaths of our ambassador to Libya and three others. Never mind putting her in charge of legislation to expand government power – let’s just skip over that and reward her with the most powerful political position in the world. Yeah, that sounds about right.

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Abusing Language

Posted on September 19, 2013 by alsanblog

Usually it’s liberals who abuse language in the best Orwellian tradition, but evidently not wanting to be left behind, conservatives have now joined the party. In an article at the National Review Online, John Fund discusses a provision in the Obamacare law that requires members of Congress and their staffs to obtain the same health insurance policies that will be available on the government exchanges.

Fund claims this provision was meant to end what he calls “taxpayer-funded health-insurance subsidies” to those on Congress’s payroll. According to Fund, Obama evaded the law by ordering the Office of Personnel Management to interpret the provision to retain the “subsidies.” So now members of Congress and staffers will be the “only participants in the new Obamacare exchanges to receive generous subsidies from their employer to pay for their health insurance.”

But when referring to subsidies, Fund is talking about nothing other than health insur-ance benefits. Fund uses the word “subsidies” instead of “benefits” to attack government and its employees, implying free riding or handouts of some sort. If government employ-ees receive “subsidies,” however, then so do private sector employees. It’s just that in the private sector, the subsidies are “consumer funded” rather than “taxpayer funded.” No difference.

It’s unlikely that Congress intended to eliminate the health-insurance benefit when it restricted members and staffers to the same insurance products available on the health exchanges. And perhaps Congress should clarify the matter directly, but in the meantime, conservatives should stop misusing the language by replacing “benefits” with “subsidies.” It only lowers them to the level of people like Wise Boy (a/k/a Ezra Klein) or Matthew Yglesias.

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The Nature Of The Firm

Posted on September 11, 2013 by alsanblog

In a rambling post at the blog The Determined Statist (aka The Incidental Economist), Harold Pollack touches on several topics that ostensibly relate to the work of Ronald Coase, a Nobel Prize winning economist who died recently at the age of 102.

Pollack points out that Coase is widely remembered for two articles: “The Problem of Social Cost” and “The Nature of the Firm.” With respect to the second article, Pollack writes:

Here Coase noted another deceptively simple paradox of the modern market economy. We teach our Econ 101 students that the price mechanism allows a decentralized, miraculously efficient allocation of activities and resources. Under the proper conditions, anyway, the invisible hand is genuinely powerful with no need of further central planning.

Yet we somehow have these organizations called “firms,” whose internal processes more closely resemble command economies than they do the textbook price-driven competitive economy. Just today, Walmart’s publicity materials compare living-wage legislation to state socialism. Yet its managers operate an internal command economy to allocate hundreds of billions of dollars in capital while coordinating the efforts of more than two million employees.

Actually, firms organize themselves in a variety of ways. Some are very bureaucratic and hierarchical while others prefer flatter organizational structures. Yet liberals tend to ignore this variety and often characterize the internal working of a firm as a “command economy” or “central planning,” as we see here in Pollack’s post. Matthew Yglesias of Slate magazine is especially guilty of this practice.

It’s hard to understand this characterization of the firm as anything other than a tactic to generate support for more centralized control of the economy by the government. After all, if upon closer examination, central planning and command economy practices flourish in the private sector on the micro level, then why not by the government?

Of course, the historical evidence of the 20th century teaches us why not. Comparing the organization of individual firms to that of entire economies is like comparing apples to oranges. Yet that doesn’t stop liberals from taking this misleading approach as they strive to place as many people as possible under the control of the central authority.

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